Of course, the new iPhone X sounds like the most technologically advanced ever.  But $1,500?

Our advice: wait!  That fabulous face recognition system (even if you grow a beard!) will soon be copied. OK, the camera sounds great, but do you need it?

Freelancer.com was running hot with ads for people to stand in the queue (surely a stunt – do people really still do that?).

Let the early adopters iron out the wrinkles. And if you HAVE to have it, fly to Tokyo. According to The Financial Review Australia has slumped to 25th among countries measured by the cost of the new iPhone.  You could save $170.  Doesn’t make sense, right?

That’s right, it doesn’t. So for now, we say: Hold the phone. 

“Liar” loans

Much research has been released this week about those who borrow to buy homes.

First, the rather catchy “liar loans” made headlines everywhere, with stories claiming more borrowers overestimate their incomes and underestimating their expenses when applying for a mortgage.

According to The Financial Review, “liar loans” now account for $500 billion. The information came from a survey conducted by investment bank UBS.

Reporting a survey, the “rise in inaccurate loans poses a threat to the banking system and the economy. Not quite sub-prime, but close.

“Mortgagors are more stretched than the banks believe, implying losses in a downturn could be larger than the banks anticipate,” the UBS report maintains.

The broker surveyed 907 borrowers who had applied for a loan in the 12 months to August and found one-third of all borrowers had not provided factually accurate information.

They were most likely to lie about their living costs and expenses, with 30 per cent admitting they did so by under-representing their living costs, up from 23 per cent in 2015.

The UBS findings were released on the same day that the Reserve Bank of Australia published a study on first-home buyers. It found that while it was harder for borrowers to save enough for a deposit, those that were able to get a foot on the property ladder were sound borrowers that could service their loans.

So far, despite repeated warnings about housing affordability, mortgage arrears remain low with rating agency Moody’s reporting that just 1.7 per cent of loans in mortgage backed securities are more than 30 days overdue.

Later in the week, we heard the Commonwealth Bank is dropping rates for no-interest loans.  Er, weren’t they supposed to be toxic to the economy and creating a crisis?  

No, we can’t up pace either… 

Gosh, really?

From the ‘No, Really?’ department: the Reserve Bank of Australia says youngsters who bought homes during the financial crisis are now more financial secure than those who didn’t.

The Reserve Bank concludes that while saving a deposit “is a stretch” in today’s market, those who make the step are better placed to pay off their loans than prior to the financial crisis. The findings challenge the oft-heard warnings that recent first-home buyers are taking on more debt than they can afford, and will be left badly exposed in a downturn.

Households that manage the transition from renting to ownership – which the RBA says is becoming more difficult – end up “more financially secure than earlier cohorts” of first-home buyers.

“The rise in aggregate and individual debt ratios do not appear to be associated with an increase in household financial vulnerability – at least as far as first home buyers are concerned.”

The RBA looked at how younger Australians take their first step onto the property ladder and comparing the fate of first home buyers between 2008-2014 and from 2001-2007 .

The report found that accelerating house prices between 2008 and 2014 have forced first time buyers to save for longer to build up a deposit and borrow more, lifting the debt-to-income ratio to 330 per cent in 2014 from around 230 per cent in 2001.

Deposits have ballooned by around $28,000 to almost $70,000.

While the most recent generation of first time buyers have taken on more debt, they appear to be taking a more aggressive approach to reducing it.

Nice problem to have

Warren Buffett celebrated his 87th birthday a few days ago with a bit of a headache: What to do with the $US100 billion ($124 billion) his company, Berkshire Hathaway has stockpiled.

The celebrated sage of investing created what business analysts called his “his cash-gushing conglomerate” 50 years ago. Berkshire Hathaway now has 367,000 employees, $US24 billion in annual profit and market capitalisation approaching $US500 billion.

It’s one of the most profitable enterprises ever created.

The conundrum Buffett faces is an enviable one: What to do with all the money? In this case, $US100 billion.

Perhaps he should buy  an iPhone…

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